Stocks Stage Massive Rally

European stocks were hit hard as the European Central Bank declined to follow the Federal Reserve's lead and cut interest rates. Germany's Xetra Dax fell 4.9%, the Paris CAC 40 lost 4.3%, and London's FTSE 100 was lower by 2.3%.

There was some positive news from Asia, as Hong Kong's Hang Seng saw its biggest point gain ever, rising 10.7% after two days of heavy selling. Japan's Nikkei 225 added 2%, and other indices in Australia, India, and Indonesia surged overnight.

On the economic front, Bloomberg reported that Merrill Lynch halved its forecast for U.S. growth and is now expecting that gross domestic product will rise 0.8% for the year.

U.S. Treasury prices reversed lower, having surged early in the session. The 10-year note was down 28/32 in price, pushing the yield to 3.54%. The 30-year bond was off 29/32 in price, yielding 4.25%.

Commodities were retreating. Crude oil slid $2.22 to close at $86.99 a barrel, and gold futures lost $7.20 to end at $883.10 an ounce.